Riga Company top management.
1) Riga Company is contemplating the establishment of a share-based compensation plan to provide long-run incentives for its top management. However, members of the compensation
committee of the board of directors have voiced some concerns about adopting these plans, based on news accounts related to recent accounting standards in this area. They would like you to
conduct some research on this recent standard so they can be better informed about the accounting for these plans.
Access the FASB website and prepare responses to the following. Provide Codification references for your responses.
a) Identify the authoritative literature that addresses the accounting for share-based payment compensation plans.
b) Briefly discuss the objectives for the accounting for stock compensation. What is the role of fair value measurement?
2) Access 2010 or 2011 annual report of Wendy’s Company. Carefully study the annual report focusing on the shareholders’ equity section and related disclosures. Present your findings on the
company’s shareholders equity, providing details on the company equity structure; any diluted securities and compensation plans disclosed in the company reporting; EPS information (including
diluted EPS). Identify an accounting method the company used for the particular items related to shareholders equity.